GBP Showing Strong Forex Trend Signals
For most of this year, the financial media has been centered on the developments in the United States economy, as the election of President Donald Trump has presented some interesting juxtapositions with the current Chair of the Federal Reserve, Janet Yellen. But while these are all figures that will continue to influence the global economic climate for the remainder of the year, a good deal of attention has turned to the UK, as Great Britain is still mired in some of the complications that have been created by the historic Brexit vote.
Primarily, these types of events will affect the British Pound (GBP) and the FTSE 100, as the two most central assets for the UK economy can be found in this currency and central stock benchmark.
Major Forex Pairs
Most commonly, the GBP is traded against the US Dollar, Euro, Swiss Franc, and Japanese Yen but there is a wide variety of other currencies that can be used to trade the currency. To complete these trades, investors will need a forex trading account UK that provides access to all of these currency pairs. This will give you the tools you need to make investments based on the recent Brexit vote. In the chart below, we can see this year’s price activity in the GBP/USD.
Initially, the market response to these political events called for increased volatility both in the British Pound and in the FTSE 100. This is primarily because it would be difficult to know how this break from the European Union would impact the economy in the region. The severing of relationships geographically was widely expected to create selling pressure in both of these main assets. If you are trading in these markets, it would be possible to use your forex trading station to initiate short trades that would post gains if the GBP and FTSE 100 were to lose value.
Forex Market Analysis
Anytime you are going to initiate these types of market trades, you will need to conduct both technical analysis and fundamental analysis in order to get the best prices on your positions. For money investors, fundamental analysis will typically involve an economic assessment of things like GDP, consumer inflation, labor markets, and industrial production levels. This type of analysis can give investors important clues about the relative strength of the British economy.
Once you have made your assessments, a forex trading account will give you access to the assets that can be used to position in actual trades. The best forex brokers will offer attractive spreads, and efficient trading platform, and free access to market research that will allow you to maximize your positions and generate profitable gains over the long-term.